ARLINGTON, Va.—Existing-home sales in July decreased for the fourth consecutive month, marking the longest string of declines since 2013.
The decreases come at the same time the market has seen an uptick in foreclosures, as CUToday.info reported here.
While current demand remains strong, NAFCU Research Assistant Yun Cohen offered some reasons why this trend might be waning.
In a NAFCU Macro Data Flash report, Cohen said price cuts are becoming more common. "According to a recent Redfin report, 28% of homes on the market in July had a price drop, the largest share on record since the agency began tracking in 2009," she said. "Rental price growth has also decelerated in some markets recently, which reduces the incentive to buy. However, the lack of affordable inventory remains the largest constraint to sales."
Existing-home sales decreased 0.7% in July to a seasonally adjusted annual rate of 5.34 million; sales were 1.5% lower than a year ago. Housing affordability hit a 10-year low in the second quarter due to robust price growth and rising mortgage rates, according to the National Association of Home Builders.
Sales Down in Three of Four Regions
Sales declined in three of the four regions during July. Sales in the Northeast decreased 8.3%, followed by the Midwest (-1.6%) and the South (-0.4%). Sales in the West rose 4.4% during the month, Cohen said.
Based on current sales, there were 4.3 months of supply at the end of July, the same as June. Analysts consider six months of supply to be roughly balanced between supply and demand. Inventory decreased 0.5% in July and was unchanged from a year ago.
The median existing-home price decreased from $273,800 in June to $269,600 (not seasonally adjusted) in July. This represents a 4.5% increase from a year ago. July marks the 77th consecutive month of year-over-year price increases, Cohen noted.